In the days since we finished refinancing our rental property in Maryland, I have had some time to reflect on the process of refinancing. I hope that these 10 tips will help you if you are in the process of refinancing your home.
- Even if you have been denied in the past, keep asking. We have asked about refinancing many times over the years, but May 2012 was the first time we were told that we could refinance. Our refinance loan is known as a HARP loan (Home Affordable Refinance Program), and will only be available for a limited time.
- Pay off as much as you can while you are waiting to refinance. We paid off almost a third of our 30-year mortgage while we waited to refinance, including our entire second mortgage.
- Always pay your mortgage on-time and in-full. I think this one goes without saying, but it will make you look good, as will your good credit report. And the lower your debt-to-income ratio, the better.
- Keep all of your old documents, and keep them organized. You never know what they will ask you to find for the application process.
- Keep track of all ID numbers, account numbers, and passwords. Again, you never know what they’ll ask you to find. We gave them Brad’s most recent 401k statement dated 6/30/12. They asked us to find the most recent information dated 9/21/12. We were able to find it on the 401k’s website.
- Access to modern technology (e-mail, printer, scanner, fax machine, snail mail) is a must.
- Document all conversations, contact names/numbers, and dates. We had 3 refinance loan applications, 1 mortgage consultant, 3 loan processors (and 1 assistant loan processor), 3 under-writers, 2 notaries, a settlement company, a title company, a number of different homeowner’s insurance contacts, and more. All of these people lived in different states, had different job descriptions, and did not always communicate clearly with one another. Each time we started a new application, anything I had submitted to the previous application had to be re-submitted as we started over from scratch.
- Keep the refinance process moving forward, especially as you near the end of the month. For whatever reason, mortgage companies rush to get everything done before the end of the month. This means that they will also begin rushing you with requests for more documents at that time. Get everything done as promptly as you can so that you won’t be swamped at the end of the month.
- Shop Around. When we were displeased with Wells Fargo after our first loan denial, we called Churchill Mortgage which is recommended by Dave Ramsey. Unfortunately, they told us that our best bet was to stick with Wells Fargo and try again.
- Be Persistent. This is your house and your money. It matters more to you than it does to anyone else, so be persistent. Ask the hard questions…over and over again. Call the same person more than once a day or once a week if necessary. If someone won’t return your phone calls or e-mails, then find someone who will. Don’t take “no” for an answer.
If you are or have refinanced your home, what tips would you recommend for homeowners hoping to refinance?